The Honduran Business Elite One Year After the Coup

The first anniversary of the June 28, 2009 military coup in Honduras might just slide under the international radar, timed as it is right after the Honduran national team kicks off at the World Cup.

The Honduran business community could hardly have planned it better themselves.

Take Rafael Ferrari, for example. He is one of the owners of the country’s best professional soccer team, Club Olimpia Deportiva, a team that has contributed more players than any other to the national soccer team, Selección de Honduras, and thus closely identified with the players competing for Honduras’s honor in the World Cup competition. Ferrari also owns nine television stations and 11 radio stations, as well as various U.S. fast food chains, like Dunkin’ Donuts and Baskin Robbins. These days, he’s on center stage as the president of the Honduran Football Federation.

The World Cup provides an opportune chance for Ferrari and by extension for the Honduran regime and their backers to seek legitimacy at a time when the state is in crisis.

One part of this crisis is the political destabilization of Honduras in the wake of the coup. State forces have murdered, tortured, beaten, and disappeared activists, and there have been curfews, restrictions on movement, and media blackouts. Repression of popular movements has resulted in further restrictions on labor and land rights.

Though this may seem like a return to the country’s violent past, Dr. Juan Almendares, the former rector of the country’s biggest university, says there is an important difference between the repression following the 2009 coup and the war against the Honduran people fought throughout the 1980s. “It’s important to understand that in the eighties the direct confrontation was more the political sector working together with army,” he said. “But today, the struggle is precisely about the neoliberal economic model, imperial globalization, and this whole campaign by financial capital to gain power over our lands, to take our resources.”

Ferrari is one of a host of powerful families that make up the local machinery of this economic model, exerting great influence in Honduras. According to a report prepared by the U.S. State Department in 2008, “Many observers argued that a small elite exercised considerable control over the country’s economic, judicial, and political institutions, which created the potential for abuse of the country’s institutions and democratic governance.”

In a newspaper article widely circulated after the coup, Leticia Salomon, an expert on the Honduran military, stated that the intellectual author of the coup was Carlos Roberto Facussé, who operated with the support of José Rafael Ferrari, Juan Canahuati, Camilo Atala, José Lamas, Fredy Násser, Jacobo Kattán, Guillermo Lippman and Rafael Flores. A preliminary report on the coup put together by the Center for the Prevention, Treatment, and Rehabilitation of the Victims of Torture and their Families named Jorge Canahuati Larach, Ricardo Maduro Joest, José Rafael Ferrari, and Carlos Flores Facussé as the “visible face of the coup.”

Ever since last summer, these family names have been scrawled across walls and buildings in the Honduran capital of Tegucigalpa. Known for controlling interests ranging from banks to fast food to media outlets and car dealerships, these families fit within William I. Robinson’s description of a transnational capitalist class (Robinson, William I. Latin America and Global Capitalism. John Hopkins University Press, Baltimore (2009), pp. 41). They are among the powerful owners and managers of transnational corporations and financial institutions throughout Honduras.

Many of these families, like the Canahuati and Facussé families, are directly linked to flows of foreign direct investment through the maquila sector. Rising up in the 1980s on the impetus of the Caribbean Basin Initiative, their position gained even more strength with the first round of structural adjustment to the Honduran economy in 1990. Since then, this transnational capitalist class has used the desperate conditions of millions of Hondurans to achieve an economic dominance unparalleled in the country.

After President José Manuel Zelaya raised the minimum wage in late 2009, the National Industrial Association (ANDI), which represents the interests of transnational corporations in Honduras, issued an eerie warning in a position paper penned by Adolfo Facussé: “Now that there is an inevitable necessity to take measure that nobody would have wanted, or to close businesses, and add threat to the insult, President Zelaya and his acolytes in the union movement are obliging the business sector to defend themselves and without wanting to, will awaken the tiger.”

What has happened in Honduras since the coup is the fusion of the transnational business class with government. Today, President Porfirio Lobo’s Foreign Minister Mario Canahuati remains as a director of the Lovable Group, which owns four export processing zones and produces products for Costco, Hanes, Russell Athletic, Footlocker, JC Penny, and Sara Lee, and is one of the largest industrial groups in Central America.

Honduras’s new government and some of its allies, like the United States, are working overtime to try and undo the diplomatic damage done by the coup. In April, Canahuati was in Washington DC, where he met with Hillary Clinton and officials from other states as well. And earlier this month, Clinton pushed the Organization of American States to re-admit Honduras.

The diplomatic signals the Lobo government has been trying to transmit are not that hard to decipher. Among them are that the new government respects human rights, that it is committed to improving social conditions in Honduras, and ushering in a new wave of foreign direct investment.

But one year into the coup, it remains unclear whether the transnational capitalist class alleged to have planned the coup has benefited economically from its actions.The entire economy of Honduras has been hit hard by the ongoing effects of the coup, as well as by the economic crisis experienced in the United States since 2008.

The campesinos in the southern region of Honduras have been among the hardest hit. The depressed economic situation combined with a drought has caused tens of thousands of people to seek emergency food assistance from the World Food Program since the beginning of 2010.

Many argue that increased repression and military spending since the coup have negatively affected the poor majority of Hondurans. “How much is the coup costing? What are the losses to the country? It’s been calculated at $30 million a day, in one of the poorest countries in Latin America,” says Almendares.

Foreign direct investment in Honduras dropped 44% in 2009, hitting its lowest level in ten years. The Heritage Institute, a U.S. right-wing think tank, reduced the score of Honduras’ “economic freedom index” after the coup.

The coup government has proposed a number of pro-business laws, ranging from a new mining law to a new law promoting international investment, that have yet to be passed. But Zelaya’s biggest reforms, which include raising the minimum wage, joining the Bolivarian Alternative for the Americas, and opening up a process of constituent assembly, have already been rolled back by the coup regime. That said, in other areas only baby steps towards increasing foreign direct investment have been made. The Lobo government, however, has granted an additional 500 non-metallic mining concessions, some of which went to a subsidiary of transnational mining company Goldcorp Inc.

Vast sectors of Honduran society have been politicized by the coup and the events that followed. And while many may pause and enjoy Honduras’ go at the World Cup, it’s not likely they’ll forget Rafael Ferrari’s name, or the role he played in the coup.